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Budget Proposal Raises Worries of Waitlist for Child Care Subsidy

Mar 10, 2016VTDigger.orgElizabeth Hewitt

A state program that helps low-income families afford child care is not slated for an increase in the state’s budget for the next fiscal year. That could be a further stress on a program that is already stretched thin due to a number of factors — including the high number of young children in state custody.

Gov. Peter Shumlin’s budget proposal for fiscal year 2017 does not include more money for the child care financial assistance program.

The program, operated through the Department for Children and Families’ child development division, provides some degree of financial support for child care for 8,500 children between the ages of 6 weeks and 13 years.

Families at or below 200 percent of the federal poverty level can qualify for the child care subsidy, which also requires that parents be engaged in work or educational activity.

Some people involved fear that without a budget increase, the state would start using a waiting list, meaning families that are eligible would need to wait until there is an opening before they can get the subsidy.

DCF Deputy Commissioner Reeva Murphy, who oversees the division, said a waiting list would be the last resort. The department likely would seek to move money from other programs or to get an increase under the midyear budget adjustment before implementing a waitlist, she said.

“It is not our preference, and we would not do that without making an attempt to fully fund what we needed,” Murphy said.

She also said trend lines indicate that the demand for the program may not increase as much in the near future as it has in the past. The department is “guardedly optimistic” that the program will be able to operate within a level-funded budget, she said.

For some child care centers, the program pays for a large number of the clients.

About 90 percent of the children at New Beginnings Childcare Center in St. Johnsbury are subsidized, according to the center’s director, Maryann Baker.

“It’s huge to my clientele,” Baker said. “It means the difference between whether these children would get quality care, really.”

The program calculates the subsidy amounts based on market rate studies of the cost of child care in Vermont, using a federal recommendation that the subsidy should cover the full tuition at three-quarters of the facilities in the state.

The current subsidy is based primarily on the market rate study from 2008, plus a slight increase added in 2013. But child care fees have increased since that time. Today, the subsidy covers the full tuition of just a quarter of all child care.

Because of the rate, many child care centers charge an additional fee, called a copay, to families that use the subsidy. For many families, the additional fee is difficult to afford.

Murphy said the state does try to find ways to help families deal with the copay. One program ensures that families do not pay copays if they go to the highest-rated centers in the state, for instance.

Child care centers say they also try to help families.

According to Cindy Boyce, who runs the New Beginnings location in Wells River, even the copay may be too expensive for many families that qualify for the subsidy.

“We try to work it out with them, but it’s hard for some families,” Boyce said.

The center works with families to try to find an arrangement they can afford, she said. In some cases that may mean the child comes to the center four, rather than five, days a week.

Meanwhile, the subsidy program has seen an additional stress as the number of young children in state custody has increased.

The state had 539 children under age 6 in its custody in fiscal year 2015 — nearly double the total two years earlier, when the number was 284.

Murphy noted that even with the recent increase, children in DCF custody are not a large proportion of the total number of children served under the child care subsidy program.

Those children do tend to have more expensive needs, she said. The department tries to ensure that those kids, many of whom come from traumatic backgrounds, are served through the state’s highest-quality programs. Also, because they are in the state’s custody, the state pays the copay in full.

Collectively, the increase has contributed to driving up the average cost per child, she said.

Kelley Todriff, family and mental health services program manager at Rutland County Head Start, said she has noticed the increasing number of children in state custody in her program in recent years.

In addition to serving as a Head Start center, the facility operates for several hours out of the day as a child care center.

Todriff said families with young children would likely feel a big impact if the state were to adopt a waiting list for the subsidy program.

“Vermont has never had that,” Todriff said. “We definitely would feel the effects of that.”

The program came up in a memo the House Human Services Committee sent to the House Appropriations Committee on the governor’s budget proposal in late February. The memo is part of an annual process in which the committee drafting the budget seeks input from legislative policy committees.

The House Human Services Committee was “surprised” that there may be a waitlist for child care services, according to the memo. Members wrote that they would like more information about who would be affected by a waitlist and when it may begin.

“Access to child care is a problem,” said Human Services Chair Ann Pugh, D-South Burlington, noting that child care openings for infants especially can be scarce and expensive. “The cost is high, and the cost is high for child care as an industry.”

Pugh said she would like to see more scrutiny of the money that the state is spending on child care now.

“We know that high-quality child care is important,” she said. However, she would like to see more study of how high-quality programs correlate to preparing young children for school.